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August 13, 2013 at 02:16 PM
The share of assets under management held by independent advisors grew to an estimated 35.3 percent in 2012, up from 34.3 percent in 2011 and 33.8 percent in 2012, new research shows.
So reports Cerulli Associates in a new study, “Boutique Advisory Firms and RIAs: Balancing Scale and Independence for Top-Tier Advisors.” The survey examines both the immediate and long-term impact of boutique firms in the wealth management arena.
Currently, the report indicates, independent advisors constitute just over four in 10 (40.2 percent) of advisors, a proportion that has changed little since 2007, when they made up 39.6 percent of advisors. Employee advisors still comprise a significant majority (59.8 percent) of the total.
“We’ve seen a significant increase in the independent advisor market share from 29 percent in 2007 to more than 34 percent in 2011,” says Scott Smith, director of Cerulli Associates and author of the research. “As more advisors move toward independence, they become more challenging for managers to address.
“However, by targeting boutique advisory firms, asset managers are able to gain entry into and target this growing market segment,” he adds.
The report defines boutique firms as advisory practices of “limited scale,” focus on “above average advisors” and make advisor-client relationships “central to the firm’s value and revenues.”
